Effects of Audit Committee Practices on Service Delivery in Water and Sewerage Companies in Kenya

Abstract

Prudent corporate governance requires an all-encompassing approach focused on democratic values, legitimate representation, and involvement while respecting and safeguarding the interests of all stakeholders. Corporate governance fosters successful organizations that impact society positively. A central concept in corporate governance is the effective execution of the oversight role, majorly accomplished through independent audit committees. Inconsistent or ambiguous audit scope often results in disputed financial reporting and audit processes, with boardroom wrangles that sometimes spill over to the performance of official tasks and the provision of services. The research aimed to answer the question “Does the presence of independent audit committees influence the quality of services provided by water and sewerage companies in Kenya?” Using a descriptive research design and stratified sampling approaches, the study sampled respondents from among management, employees, and customers. The research found that board diversity had a statistically positive effect on the quality of services, and audit committees held the management and staff accountable in their respective functional areas. The study concludes that audit committees should be sufficiently diversified for impartiality in exercising oversight on the firm; and recommends that management should uphold the audit committee’s resolutions to guarantee efficient financial reporting practices.